By Paul Vieira
OTTAWA--Canada's Conservative government unveiled a series of
family-focused tax breaks Thursday, signaling its plans to follow
through on a pledge to share some of next year's expected federal
budget surplus.
Canada will offer tax-relief measures totaling 26.76 billion
Canadian dollars ($23.97 billion) over a six-year period ending in
March 2020. The most high-profile of the measures is income
splitting, in which a higher-income spouse would be eligible
transfer up to C$50,000 of taxable income to a spouse in a lower
income-tax bracket. The transfer could net the couple a tax savings
of up to C$2,000 in a given year.
The move on income splitting fulfills a promise that Prime
Minister Stephen Harper made during the 2011 election campaign.
Next year, Mr. Harper likely will be seeking a fourth straight
mandate, which would make him one of the longest-serving leaders in
Canadian history.
The measures still require a vote in Canada's legislature, but
passage is assured as the ruling Conservatives hold a majority of
seats in both the lower and upper houses of the Parliament.
Mr. Harper signaled earlier this month that his government would
move quickly to implement tax-relief measures, after reporting a
much narrower-than-anticipated deficit in the 2013-14 fiscal year.
Mr. Harper has forecast a smaller deficit for this fiscal year,
although the country's budget watchdog and economists at
Toronto-Dominion Bank say Ottawa is on track for a surplus ranging
from C$3.6 billion to C$5 billion.
Mr. Harper and his governing Conservatives, who have been
trailing in the polls for more than a year to the opposition
Liberal Party, are trying to capitalize on the coming budget
surplus ahead of the next election, which must be held no later
than October 2015.
In the coming 12-month period, Mr. Harper is likely to portray
his administration as offering a steady hand on economic policy
levers, given that Canada emerged relatively unscathed from the
global financial crisis and subsequent recession, and still managed
to rein in the large deficit it accumulated during the downtown.
The federal deficit reached a peak of C$55.60 billion in 2010 as
tax revenue fell and the government pursued a large stimulus
program to spark the country's economy.
Mr. Harper also is attempting to position his government as a
strong voice on foreign affairs and a fierce advocate in combating
terror, especially in light of two attacks this month that killed
two soldiers and led to a gunman storming the country's
Parliament.
Write to Paul Vieira at paul.vieira@wsj.com